Fort Collins council approves Foothills Mall redevelopment deal

Most of the long-sought project is expected to be completed by winter 2015.

Jan. 14, 2014

The Fort Collins City Council on Tuesday approved a complex financing and reimbursement agreement for the redevelopment of Foothills Mall. The financing agreement calls for $53 million in public support for the project, seen here in a rendering. / Courtesy of Alberta Development Partners LLC

After months of haggling on land use and financial issues, plans to redevelop the Foothills Mall are ready to move forward.

The Fort Collins City Council on Tuesday approved a complex financing and reimbursement agreement for the redevelopment project with the mall’s owner and developer on a 4-2 vote.

Council members Ross Cunniff and Bob Overbeck opposed the deal. Mayor Karen Weitkunat, who lives near the mall, did not participate in the meeting because of the potential for a conflict of interest.

The financing agreement calls for $53 million in public support for the project. It also describes in detail how the redevelopment should proceed, touching on subjects ranging from what happens if bonds that would fund the project are not issued to how many trees would be planted.

Council members supporting the project said it would be good for Fort Collins and long-running efforts to revitalize the Midtown section of the city.

“It’s a public-private partnership that looks out for the best interests of our community,” said Councilman Wade Troxell.

But Cunniff said rebuilding the mall at a high cost to taxpayers and shoppers would not be a good deal for the city, especially during a time when retail stores are struggling because of online sales.

He also questioned the use of tax increment financing, or TIF, to fund the project at the expense of taxing entities such as Larimer County.

TIF is a financing tool that is allowed under state urban renewal law. As property values within an urban renewal area increase through redevelopment, tax revenue generated above a base level is diverted from other taxing entities to fund public improvements.

“It’s not about the mall. … I agree we need something there,” Cunniff said. “I just don’t think this package is the right deal for the citizens of Fort Collins, the taxpayers of Larimer County or the taxpayers of Colorado.”

Bonds carrying a total cost of $160 million are expected to be issued by a metropolitan district that covers the mall site to finance some public improvements. The bonds would mature in no more than 25 years.

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Overbeck said the cost of redeveloping the mall as proposed would be too high for the community.

“I think the risks are greater than the rewards,” he said.

The deal was set up to minimize the city’s financial risk, said Councilman Gino Campana. It’s also been revised so that if revenue collections exceed projections, the debt could be paid off early.

“If we as a city want to take on more risk, we can decrease that number,” he said. “But as an engineer … a lot of us like not having that risk.

“It’s a tough number to swallow, but I understand why you did that.”

Construction on the project began in December with the demolition of the Tres Margaritas building to make way for a new Sears store on South College Avenue.

The developer expects to release details of the next phase of construction Wednesday, said Russ Rizzo, a spokesperson for mall owner Alberta Development Partners. But residents are likely to see increased activity soon.

Work on relocating an irrigation ditch that is part of the redevelopment plan is expected to begin in the coming weeks. Partitioning inside the mall to make way for moving stores also is coming.

Exterior construction is likely to begin in February or March, Rizzo said.

Some mall businesses will remain open during construction of the project. Partial opening of the shopping center is expected by spring 2015 with the majority expected to be ready for next year’s 2015 holiday season.

About two dozen people addressed the council on the project, with supporters outnumbering critics three to one.

Members of the business community said revitalizing the mall and the Midtown areas is critical to the city’s economic health. Critics said the project would benefit the developer but not the community as a whole.

Adjustments to the agreement were being made up to the council’s meeting in response to council members’ questions. The meeting was delayed for more than 20 minutes while a document detailing how the project has changed since the council last saw it in May was distributed to council and the public.

City officials said 15 changes have gone through the land-use process, including two additional buildings, a smaller theater, a four-level parking structure and the location of the Foothills Activity Center.

Other elements of the redevelopment approved by the council included vacating rights of way for two streets and granting an easement for the relocation of an irrigation ditch to make way for the project.

The council also pledged to continue working with Larimer County and other taxing entities to develop model on

The financial package is similar to an agreement the council approved in May that was never signed.

Significant changes to the project, including a 10 percent reduction in commercial space, required it to go through the city’s planning process and the updated redevelopment agreement to come back to the council.